Xy95lywmi - Midterm Exam Far
Xy95lywmi - Midterm Exam Far
NAME: Date:
Professor: Section: Score:
1. This branch of accounting involves teaching accounting, taxation, and other business-related
subjects.
a. Accounting education
b. Government Accounting
c. Accounting research
d. Tax accounting
3. This branch of accounting focuses on catering to the information needs of external users.
a. Management accounting
b. Financial accounting
c. Auditing
d. External accounting
4. Recording assets at their acquisition cost (entry value), rather than at their net selling price (exit
value), is in line with the concept of
a. Single entity concept.
b. Historical cost concept.
c. Going concern concept.
d. Matching principle.
5. A business sells goods in Year 1 but collects the sale price only in Year 2. According to the accrual
basis and time period concepts, the business should include the sale in its income statement in
a. Year 1.
b. Year 2.
c. Year 3.
d. Every year
6. The generally accepted accounting principles (GAAP) in the Philippines are represented by the
PFRSs which are issued by the
a. Pinoy Accounting Standards.
b. Kapisanan ng mga Kontador sa Pilipinas.
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7. Under this concept, the business is treated separately from its owners.
a. Separate entity concept
b. Historical cost concept
c. Going concern
d. Matching principle
8. A business has total assets, liabilities, and equity of ₱10,000, ₱7,000 and ₱3,000, respectively, at the
beginning of the period. During the period, total liabilities decreased to ₱4,000 while profit was
₱5,000. How much is the ending total assets?
a. 12,000
b. 11,000
c. 9,000
d. 7,000
Nov. 1, 20x1 The business owner provides ₱2,000,000 cash as investment to the business.
Nov. 5, 20x1 Entity A obtains a ₱500,000 loan and issues a promissory note.
Nov. 8, 20x1 Entity A acquires land costing ₱1,000,000 on cash basis.
Nov. 16, 20x1 Entity A renders services worth ₱1,200,000 on account.
Nov. 30, 20x1 Entity A pays salaries expense of ₱280,000.
9. How much is the total assets at the end of the period? (Hint: use the basic accounting equation)
a. 4,320,000
b. 3,840,000
c. 3,420,000
d. 2,980,000
10. How much is the total liabilities at the end of the period?
a. 500,000
b. 520,000
c. 580,000
d. 680,000
11. How much is the equity at the end of the period after taking into account income and expenses?
a. 2,920,000
b. 2,980,000
c. 3,120,000
d. 3,280,000
12. The beginning equity is ₱5,000. If total income for the period is ₱8,000 while total expenses are
₱6,000, how much is the ending balance of equity?
a. 7,000
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b. 5,000
c. 3,000
d. 1,000
13. The ending equity is ₱9,000. If total income for the period is ₱5,000 while total expenses are ₱8,000,
how much is the beginning balance of equity?
a. 12,000
b. 9,000
c. 6,000
d. 0
14. At the start of the period, a business has total assets of ₱500,000 and total liabilities of ₱300,000.
During the period, the business earned total income of ₱1,000,000 and total expenses of ₱640,000.
No additional investments or withdrawals were made by the owner. Total assets at the end of the
period were ₱830,000. How much is the total liabilities at the end of the period?
a. 280,000
b. 270,000
c. 260,000
d. 240,000
17. It is an account used temporarily to store discrepancies in the accounts pending their analysis and
permanent classification.
a. Suspense account
b. Horror account
c. Thriller account
d. Romantic comedy account
18. This account is used to record payments received from customers prior to the delivery of goods or
rendering of services.
a. Accrued income
b. Unearned income
c. Prepaid asset
d. Accounts receivable
b. a subsidiary ledger.
c. a special journal.
d. a listing of all account titles.
24. At the beginning of the period, Addy had a cash balance of ₱20,000 and a notes payable of ₱15,000.
During the period, Addy collected ₱11,000 accounts receivable, paid ₱8,000 notes payable, and
issued additional notes payable of ₱5,000 in exchange for cash. How much are the ending balances
of cash and notes payable, respectively?
Cash Notes payable
a. 17,000 20,000
b. 20,000 12,000
c. 28,000 12,000
d. 36,000 20,000
25. At the beginning of the period, Entity A’s notes payable had a balance of ₱1,200. During the period,
Entity A obtained an additional loan of ₱800 and made total payments of ₱500. How much is the
ending balance of Entity A’s notes payable?
a. 1,800
b. 1,500
c. 1,200
d. 900
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26. A business has total assets of ₱640,000 and total equity of ₱360,000 at the beginning of the period.
The business earns income of ₱220,000 during the period and reports profit of ₱80,000. There were
no transactions with the owner during the period. Total liabilities increased by ₱40,000 by the end
of the period. How much is the total assets at the end of the period?
a. 560,000
b. 440,000
c. 860,000
d. 760,000
Instruction for the next twelve (12) questions: Choose the letter corresponding to the correct journal
entry for each of the transactions described.
Debit Credit
a. Inventory Sales
b. Cash Accounts receivable
c. Cash Sales
d. Cost of sales Cash
39. The amounts shown on this trial balance represent the beginning balances of accounts in the next
accounting period.
a. Unadjusted trial balance
b. Adjusted trial balance
c. Post-closing trial balance
d. Carry-over trial balance
42. If the ending balance of accounts payable is ₱100,000 and the total debits and credits to that account
during period were ₱60,000 and ₱40,000, respectively, the beginning balance must be
a. 0
b. 20,000
c. 80,000
d. 120,000
44. On January 1, 20x1, Johnny Company acquires a building for ₱10M. The building is estimated to
have a useful life of 20 years. How much expense is recognized in 20x1 in relation to the building?
a. 10,000,000
b. 1,000,000
c. 500,000
d. 0
45. In a worksheet, which of the following is prepared after the unadjusted trial balance?
a. Adjusted trial balance columns
b. Income statement columns
c. Adjusting entries columns
d. Balance sheet columns
46. If total debits exceed total credits in the balance sheet columns of a worksheet, there is
a. profit.
b. loss.
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c. owner’s drawings.
d. an error.
48. It is a journal entry that is the exact opposite of a previous adjusting entry.
a. inside-out entry
b. closing entry
c. gnitsujda entry
d. reversing entry
51. Which of the following statements regarding owner’s capital is not valid?
a. It is increased by investments to the business by the owner.
b. It is increased by income earned by the business.
c. It is increased by distributions to the owners (drawings by owners).
d. It is decreased by expenses incurred by the business.
b. Equipment
c. Sales
d. Accumulated depreciation
55. Entity A has accounts receivable of ₱500,000 and a related allowance for bad debts of ₱120,000.
How much is the carrying amount of the accounts receivable?
a. 620,000
b. 500,000
c. 480,000
d. 380,000
56. The financial statement that shows information on assets, liabilities and equity is the
a. balance statement.
b. income sheet.
c. balance sheet.
d. income statement.
57. This represents the unused portion of rentals that have been paid in advance.
a. Prepaid rent
b. Travel expense
c. Rent expense
d. Cost of sales
58. The balance of accumulated depreciation in Entity A’s unadjusted trial balance is ₱100,000. If the
adjustments columns in the worksheet show a debit adjustment of ₱20,000, how much is the
balance of accumulated depreciation that is extended to the adjusted trial balance columns of the
worksheet?
a. 80,000
b. 100,000
c. 120,000
d. 0
59. When preparing closing entries, which of the following accounts is debited when closing to the
“Income summary” account?
a. Depreciation expense
b. Owner’s drawings
c. Sales
d. Salaries payable
60. If the “Income summary” account has a credit balance after all income and expense accounts are
closed, there is
a. profit.
b. loss.
c. owner’s drawings.
d. an error.
61. Which of the following adjustments can be reversed in the next accounting period?
a. Adjusting entry to take up depreciation expense
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63. Entity A received a 12%, ₱200,000, one-year, note receivable on October 1, 20x1. Entity A uses a
calendar year period. The principal and interest on the note are due on October 1, 20x2. How much
is the interest income to be accrued on December 31, 20x1?
a. 24,000
b. 12,000
c. 6,000
d. 0
64. At the beginning of the period, a business has a cash balance of ₱20,000. During the period, total
cash collections and total cash payments amounted to ₱100,000 and ₱70,000, respectively. How
much is the ending balance of cash?
a. 10,000
b. 30,000
c. 50,000
d. 70,000
65. At the beginning of the period, a business has accounts payable of ₱200,000. During the period, the
total debits and credits to the accounts payable account were ₱100,000 and ₱70,000, respectively.
How much is the ending balance of accounts payable?
a. 230,000
b. 170,000
c. 370,000
d. 30,000
66. At the beginning of the period, the owner’s capital account of a business has a balance of ₱220,000.
During the period, the total debits and credits to that account were ₱60,000 and ₱70,000,
respectively. How much is the ending balance of the owner’s capital account?
a. 230,000
b. 210,000
c. 350,000
d. 90,000
67. If the ending balance of accounts receivable is ₱100,000 and the total debits and credits to that
account during period were ₱60,000 and ₱40,000, respectively, the beginning balance must be
a. 0
b. 20,000
c. 80,000
d. 120,000
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68. The equipment of ABC Co. has a historical cost of ₱500,000 and an accumulated depreciation of
₱120,000. How much is the carrying amount of the equipment?
a. 620,000
b. 500,000
c. 480,000
d. 380,000
69. The business acquires equipment. The business allocates the equipment’s cost over the equipment’s
useful life, instead of expensing it right away. The portion of the equipment’s cost that is expensed
during the period is recorded as
a. Bad debts expense.
b. Equipment.
c. Allowance for bad debts.
d. Depreciation expense.
70. Revenues earned from rendering services are recorded in this account.
a. Sales
b. Service fees
c. Interest income
d. Gains
75. Which of the following is equal to total goods available for sale?
a. Net purchases – Inventory, beg.
b. Cost of sales – Inventory, end.
c. Inventory, end. + Cost of sales
d. Net purchases + Inventory, end.
“I press on toward the goal to win the prize for which God has called me heavenward
in Christ Jesus.” (Philippians 3:14)
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